News

Former GIPSA Chief to Address Cattle Prodcuers

04 May 2012

US - In only his second and third appearances since stepping down from his federal post in January as Administrator for the US Department of Agriculture (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA), J. Dudley Butler will be in the Dakotas this month to inform cattle producers about the future competitiveness of the US cattle industry.

Hosted by the Independent Beef Association of North Dakota (IBAND), the South Dakota Stockgrowers Association (SDSGA), and R-CALF USA, Mr Butler will first speak to area cattle producers at 7:00 p.m. on Wednesday, May 16 at the Kist Livestock Auction in Mandan, North Dakota. At 7:00 p.m. on Friday, May 18, Mr Butler will speak to area producers at the Fort Pierre Livestock Auction, Fort Pierre, South Dakota. The public is cordially invited to attend both meetings.

Mr Butler was considered the last of the team of reformers appointed by the Obama Administration to put an end to antitrust and anticompetitive practices in the US livestock industry. His resignation was preceded by Christine Varney, former chief of the US antitrust division for the US Department of Justice.

While at his federal post, Mr Butler proposed a rule to clarify and finally implement provisions within the 90-year-old Packers and Stockyards Act of 1921 that prohibits the nation’s meatpackers from harming independent livestock producers through unfair, deceptive and discriminatory cattle-buying practices.

Mr Butler said his proposed rule contained provisions to “prevent actions by the packers, swine contractors, and live poultry dealers against family farmers and ranchers such as retaliation, fraud and bad faith, just to name a few.”

But, his proposed rule met a firestorm of opposition, both from the meatpacking industry and the National Cattlemen’s Beef Association (NCBA). The rule’s opponents submitted industry-sponsored economic studies claiming the rule would cost the industry and the economy almost $2 billion. However, USDA’s chief economist, Joseph Glauber, stated in a memo that the meatpackers’ onerous cost estimate was based on a false assumption. He stated the meatpackers’ study “inaccurately claims that the proposed rule ‘relieves plaintiffs from the burden of proving competitive injury.”

Congress was nevertheless swayed by the meatpackers’ study and in an unprecedented maneuver, it cut all funding available to Mr Butler to issue a final rule, says R-CALF.

“Independent cattle producers are being misled by the NCBA’s and the meatpackers’ old rallying cry that they and the rest of the cattle industry do not want the government to regulate their industry,” said Mr Butler adding: “But, what they are not telling producers is that the unregulated control by the meatpackers over independent producers is far more overreaching and more oppressive than any government regulations. Just look at the one-sided contracts now prevalent in the poultry and hog industries.

“Opponents to my proposed rule want to sell the industrialised model of vertical integration, but I wanted to preserve the independent producer model,” concluded Mr Butler.

Kenneth Graner, President of IBAND and R-CALF USA member, will donate a cow and Allen Badure, member of both the SDSGA and R-CALF USA, will donate a yearling to be auctioned off in rollover auctions held in conjunction with the Kist Livestock Auction sale on May 16 and the Fort Pierre Livestock Auction sale on May 18, respectively, with proceeds going to support each of the sponsoring organisations. The meetings will be held in the evenings following the sales.

“Cattle producers deserve to hear first hand how the proposed GIPSA rule was derailed and what is likely in store for those of us who are still engaged in the business of ranching,” said Mr Graner, adding: “These meetings will give producers a chance to learn first-hand about the power struggles that are shaping the future of our industry and what they need to do to ensure the outcome of that struggle is one that allows us to continue ranching as independent producers.

“We are excited to host former GIPSA Administrator Dudley Butler in South Dakota so that our producers can understand the struggles that Dudley and others faced in their fight to help us reform our livestock markets,” said Shane Kolb, President of the SDSGA.

“The fight for fair and competitive markets in the cattle industry did not go away when GIPSA rules weren’t implemented. The lack of competition in our livestock markets will continue to have a significant impact on the viability of our family farms and ranches. We have to continue pursuing these policy changes for the future of our rural communities.”

“About 250 people attended Dudley Butler’s recent presentation in O’Neill, Nebraska, and we are still receiving calls from producers who said it was one of the most informative and eye-opening meetings they had ever attended,” said R-CALF USA CEO Bill Bullard, “If you’re in the ranching business and want to stay, these are must-attend meetings.”